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Schools warned on coercive donations

Private schools that pressure parents to pay tax-deductible building levies are in a "grey area" of tax law because such donations are meant to be voluntary, new analysis has found.

Under Tax Office guidelines, school building levies are tax-deductible if they are given freely and paid into a public fund used only for buying, constructing or maintaining buildings.

But an Australia Institute report to be released today said private schools used coercive language to get parents to pay the levies, which can be up to $1000 a year.

The Jesuits' St Aloysius College in Sydney came under fire in the press this morning for having a foundation that receives donations which, the college website states, "parents are expected to join at a level in keeping with their personal circumstances".

"While tuition fees cover a major portion of a boy's education at St Aloysius College, fees do not and cannot provide all the funds we need to undertake building projects and new major capital works."

The website says the Foundation Building Fund, which has raised $14.7 million in the past 12 years, was "vital to the provision of new buildings and resources".

The school did not respond to Herald inquiries but Terry Chapman, director of the NSW Association of Independent Schools, said he was satisfied St Aloysius "was not doing the wrong thing" because it clearly advised that the levies were voluntary. The school's website says a "tax-deductible donation of $235 per family is optional".

"I believe that all the schools obey the law and don't engage in practices that are contrary to the tax act," he said. "We do not support any school that is not abiding by the rules."

The Sydney Catholic Education Office, which runs 148 schools, said its building and maintenance levy - $252 to $324 per family per year - was not tax-deductible and was paid on top of school fees.

Cardinal George Pell told ABC Radio that "nobody is forced to send their children to Catholic schools"..

"We have a right to teach our Christian teachings and to follow out the consequences of that."

Schools accused of gouging levy from parents (Sydney Morning Herald 24/5/04)

Catholic Education Office laments teachers' row (ABC 21/5/04)
St Aloysius College | Schedule of Fees and Charges
Australia Institute | Tax Deductibility of Donations to School Building Funds

24 May 2004